Stock Market Outlook August 5: Nifty May Struggle Near 25,000, Pullback Likely; Sensex Holds Bullish Momentum

The Indian stock market is expected to open on a cautious note today, August 5, despite positive global cues, as investor sentiment remains weighed down by renewed geopolitical tensions following US President Donald Trump's threat of higher tariffs. Early trends from Gift Nifty point to a subdued start, with the index trading around 24,757 - about 37 points lower than the Nifty futures' previous close.

Stock Market Outlook August 5

On Monday, domestic equity benchmarks closed on a strong note. The BSE Sensex surged 418.81 points or 0.52% to end at 81,018.72, while the Nifty 50 climbed 157.40 points or 0.64% to settle at 24,722.75, ending above the 24,700 level.

Sensex Today: Technical and Long-Term Outlook

The Sensex has formed a bullish reversal candle on the daily charts, signaling positive momentum in the near term. Technical analysts suggest that this pattern could support further upside, provided global headwinds remain under control.

Adding to the optimism, global brokerage firm Morgan Stanley released a bullish outlook for Indian equities in its latest note titled 'India Equity Strategy Playbook'. The firm expects the Sensex to touch 1,00,000 by June 2026 in a bull-case scenario, backed by strong macro fundamentals, policy reforms, infrastructure development, and a growing entrepreneurial class.

In its base case (50% probability), Morgan Stanley forecasts the Sensex hitting 89,000 by July 2026, assuming continued macro stability, a favorable India-US trade environment, benign oil prices, and increased private sector investment.

"This level assumes continuation in India's gains in macro stability via fiscal consolidation, increased private investment, and a positive gap between real growth and real rates. Robust domestic growth, slow growth in the US but no recession, and benign oil prices are also part of our assumptions. In our base case, we also assume a benign India-US trade deal," the report stated.

Nifty Today: Resistance at 25,000, Pullback Likely

The Nifty 50 formed a bullish candle on the daily charts, which, when viewed with the prior session's bearish candle, indicates a potential pullback rally within a broader corrective phase.

According to the weekly options data, the 25,000 strike holds the maximum Call open interest (1.06 crore contracts), suggesting that this level could act as a strong resistance zone for the index in the short term. It is followed by resistance at the 25,500 (88 lakh contracts) and 24,800 (80.14 lakh contracts) levels.

Notably, maximum Call writing was seen at the 25,500 strike (15.9 lakh contracts), signaling that traders are positioning for a cap on the upside. Meanwhile, Call unwinding at the 24,800, 24,700, and 24,600 strikes - which shed over 13 lakh contracts each - reflects reduced bearish bets around those levels.

Disclaimer

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